This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Federal deadlock delivers a gut punch to restaurants

The U.S. government standoff is cutting the legs out from under what seemed to be a healthy recovery for the restaurant industry. The short-term repercussions are obvious; the potential long-term impact is less clear.

According to a report in Eater, restaurants in Washington, DC, felt the pinch almost immediately, with drops in lunch, dinner and event traffic, especially near Capitol Hill. Smaller cities with large pools of federal workers are being hurt as well.

A number of restaurants that happen to be located in national parks and other federal property, such as the City Tavern in Philadelphia and the popular Cliff House in San Francisco, have been forced to close during the standoff, and the operators are steaming. The owners of the Cliff House say they are losing $10,000 in revenues each day the popular spot overlooking the Pacific Ocean remains shuttered.

Another casualty of the shutdown is food inspection. Many FDA inspectors who eyeball imported food have been furloughed, leaving the safety of the food supply in question. A BuzzFeed report notes that the USDA will continue to monitor meat and poultry, but FDA is responsible for checking imported seafood, produce and packaged foods.

Seafood is arguably the riskiest category. “About 80 percent of the seafood we consume is imported, and a lot of it comes from countries in Southeast Asia that may have very limited or even nonexistent regulatory programs,” says Center for Science in the Public Interest food safety director Caroline Smith DeWaal.

Finally, the shutdown adds more uncertainty to an already shaky economic outlook. “While the initial impact of the shutdown is mostly regional, the continued inability of the government to break the gridlock dampens economic confidence nationwide – sentiment that was not exactly soaring to begin with. Even before the government shutdown kicked in, both consumers and restaurant operators were far from bullish about the direction of the economy,” National Restaurant Association chief economist Bruce Grindy observes.

Some restaurants are trying to make the most of an unfortunate situation and create goodwill through deals to furloughed federal employees. Boston Market, for example, was giving federal employees and military personnel a free whole rotisserie chicken with the purchase of a family meal this week. In Baltimore, Nando’s Peri-Peri, which has several area stores, used its Facebook page to offer a free chicken breast to employees affected by the shutdown. Other operators promoted drinks and specials for furloughed workers.